TY  - JOUR
AU  - Baxter,Marianne
AU  - Kouparitsas,Michael A.
TI  - What Determines Bilateral Trade Flows?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12188
PY  - 2006
Y2  - May 2006
UR  - http://www.nber.org/papers/w12188
L1  - http://www.nber.org/papers/w12188.pdf
N1  - Author contact info:
Marianne Baxter
Department of Economics
Boston University
270 Bay State Road
Boston, MA  02215
Tel: 617/353-2417
Fax: 617/353-4449
E-Mail: mbaxter@bu.edu

Michael Kouparitsas
Federal Reserve Bank of Chicago
E-Mail: mkouparitsas@yahoo.com
M2  - featured in NBER digest on 2006-05-01
AB  - This paper undertakes an exhaustive search for robust determinants of international trade, where "robustness" is tested using three popular empirical methods.  The paper is frankly atheoretical:  our goal is solely to establish statistically robust relationships.  Along the way, however, we relate our results to the empirical results obtained by prior researchers and to the received theory of international trade.  We find that robust variables include a measure of the scale of factor endowments; fixed exchange rates; the level of development; and current account restrictions.  Variables that are robust under certain methods and sample periods include exchange rate volatility, an index of sectoral similarity, and currency union.  However, the estimated coefficient n currency union is much smaller than estimates obtained by prior researchers.
ER  -